Climate risk regulation in Malaysia has moved decisively from guidance to su-pervision. What began with environmental classification frameworks has since evolved into formal expectations, with climate-related risks being embedded within governance, risk management and disclosure processes.
In 2021, BNM issued the Climate Change and Princi-ple-based Taxonomy (CCPT)', providing financial institutions with a principles-based framework to assess and categorise economic activities according to their climate objectives. This was followed by the Climate Risk Management and Scenario Analysis (CRM-SA) Policy Document, which set supervisory expectations across governance, strategy, risk appetite, risk management, scenario analysis and disclosure.
At the capital markets level, SC introduced Malaysia's National Sustainability Reporting Framework (NSRF), developed through the Advisory Committee on Sustainability Reporting?. The framework adopts the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board, including IFRS S2 on climate-related disclosurest.
The nation's regulatory architecture is clear-these frameworks signal that climate risks are no longer peripheral but must be treated as a financial and prudential concern.